This Week's PVC Market Shows Narrow Range Fluctuations (1.12-16)

January 16 news

I. Price Trends

According to the commodity market analysis system, this week (1.12-16) the PVC spot market showed a range-bound fluctuation, with weak price performance. As of Friday, the average price of SG-5 type PVC (calcium carbide method) in China was 4,496 CNY/ton, down 0.62% from the previous week.

II. Market Analysis

This week, PVC did not continue the upward trend from last week, instead stabilizing and slightly declining. At the beginning of the week, although some manufacturers made price adjustments, with increases within 50 yuan compared to last week, the market was constrained by a weak and volatile futures market, leading to a weaker spot market. Most dealers adjusted their offers within a small range, with little change. From the perspective of supply and demand fundamentals, manufacturers' operations are stable, with high production rates. Supply pressure remains largely unchanged, and dealer offers are generally weak. Downstream demand is insufficient, with most downstream purchases being point-based, and there is low enthusiasm for inquiries and purchases, resulting in a quiet market atmosphere. The listed prices are relatively low. Overall, the market is still driven by rigid demand, with moderate trading activity. As of now, the quotation range for Chinese PVC SG5 type calcium carbide material is mostly around 4580-4630 CNY/ton.

In the upstream calcium carbide sector, this week (1.12-16), the calcium carbide market in China remained stable, with minor fluctuations recently. According to the commodity analysis system, the change rate for this week was 0. However, since entering January, the calcium carbide market in China has mainly stopped falling, but there are currently no signs of a rebound, providing limited support to PVC.

III. Future Market Forecast

PVC analysts believe that, firstly, in terms of cost: the price of calcium carbide remains stable, and although there is an expectation for a decline in the US Gulf ethylene price (US$710-730/ton), the impact on PVC costs is limited; secondly, supply may face some contraction: maintenance at Wanhua in Fujian and Tianyuan in Yibin continues, and the operating rate in China is expected to decrease slightly, which will to some extent alleviate inventory pressure; thirdly, demand remains weak: downstream enterprises are gradually taking their New Year holidays, and purchases are mainly based on rigid demand, with a clear resistance to high prices, leading to sluggish actual transactions. Taking all factors into account, it is expected that next week, the PVC price will continue to operate in a strong but fluctuating manner, but the upward space will be constrained by the demand side. In the East China region, the price of five-type calcium carbide method PVC is expected to remain within the range of 4580-4730 CNY/ton, with a narrower fluctuation range compared to this week.